TOPIC: studio hijinks

A studio which shall remain nameless just gave me a bill for pics I had during the holiday season. The agreed upon percentages were 35% but they came back later on this bill and said that these two films were actually at 40% for one and 50% for the other. I e-mailed my rep and his response was along the lines of "since we aren't a 'firm-term' company it's very difficult for me to predict what the final terms will be". I'm not sure how to handle this situation but I will be reluctant to book any more film from this studio. Anybody else have similar experiences?

It is best to remember that when you deal with the studios it "heads they win, tail you lose".

I just hit the 90/10 deal on Fockers because my house overhead is so pitifully low and despite repeated attempts I am unable to get it raised.

A friend of mine just told me that a certain studio whose name Will not Be mentioned threatened to cut him off from first run product if he didn't get a certain payment in for their recent sales drive. (He claims to have mailed the payment but the studio claims they didn't get his check and he had to overnight a replacement check).

A certain studio whose name rhymes with Warner Brothers just demanded payment on a film I hadn't even finished running yet. I sent them a ck because I didn't want some managment bozo to not get their bonus because my theater didn't pay before I even finished the run.

Ran into this a lot over the years. Especially with the companies who are not firm terms. Won't be much longer and they will want payment every week by EFT (Electronic Funds Transfer). They already do that with the larger circuits.

same deal with us on a number of runs... but they always do this.we pay 48% on acct each week and sometimes they never settle a picture. I was hoping Newmarket had forgotten to settle Passion! It was an easy 6-7 months before they called. If it isn't "firm" it isn't over until it's over and even then it's not over. We've had Sony Classics call 4 years!!!!! after about some stupid little thing that tanked. Urg.
Michael Hurley
Impresario

Yep--gotta love the companies that are not firm term--but in reality, over the years, I have had that work in my favor sometimes--being they "finaled" with less than I would have expected. My longest "unknown terms" was "Titanic"--was not able to get a print until Feb 28 after a Dec 19th release--was not settled til around Sept--almost a year from release.

My experience is similar to wimovieman's. On balance, I'd have to say that I'm at least even, if not a bit ahead of the game. I've had them come back and nick me for a few more percentage points. On the other hand, some of them have given me percentage deals that were far lower than I'd expected. I couldn't tell you why it happens... some people would like to say they have this "great relationship" with the studios... maybe. Or perhaps it's just how their system works. In any case, if I took a look at the last 5 years, I'd have to say I'd won some and lost some.

Lee - this is entirely normal. You just don't get to see it more frequently because you are running on the tail end of the standard formulas. Lets say that I've paid each week for my film at the guestimated rate of 60/40/35 but when the film is finally settled the stream was 60/50/35. I will get a bill for the 2nd week for the 10% difference between what I paid and the settlement. I then cut a check for the difference. However, if you pick it up after the 2nd week there is not likely to be any difference between what they quoted you and the final settlement because they both came out at 35%. Occasionally, we guesstimate the 4th week at 30% and it gets settled at 35% but the studio probably gives you a better guestimate since you are picking it up later.

Then there is BV who gets payments weekly on account at 50%. When they settle it can go either way. We had a huge bill to pay for Finding Nemo because we only ran it for 6 weeks but ended up with a very helpful credit on Pirates of the Caribbean (13 weeks)/Freaky Friday (7 weeks). This is one of the least understandable parts about this business, but always expect to get a final bill on anything some time in the future. Just cut a check and don't spend any more time stewing on it. I'm not sure I can name all of the non firm term companies but they include Paramount, BV, Dreamworks, MGM, Miramax, and New Line.

When you get hit with the 90/10 then hit the roof and try to figure out how you can get your house allowance raised. (BTW - house allowances for us little guys are not based on our actual costs - but whatever we can get the studio to agree to. I'm luckier here than at my last theater where we had very low house allowances. After making a federal case of it we were able to get some on the studios to raise our house allowances, but we were still not anywhere near $10 per seat which was our goal.

Now on the subject of Warner Bros AND Warner Independent Pictures (WIP) - I've learned through bad experiences that they do these sales drives at least twice per year. They will send out a letter about 3 weeks before the end of the sales drive. Believe me - you want to receive that letter so you don't get surprised with that last minute demand for money to be overnighted OR ELSE. It is very difficult for us to meet their terms because of how we handle regular communications between our booker's office and our theater. Yes, I think that the next step will just be an electronic dip into our bank accounts which I won't like at all. Usually they schedule this drive so that it coincides with a major release that you must have. This time I was lucky. We were able to dump Phantom of the Opera and Racing Stripes earlier that I would have otherwise and replace them with equal or better choices. In this way we did not have any WB pictures in house for the last week of the sales drive which would have required us to have the money in NY within 7 days. We had only to go through our usual 14 days cycle which was fine and didn't stress us out. Don't know if I will be able to pull this off in the future and I surely don't think that they would care if they knew that we dumped their pictures solely because of the sales drive. However, if everyone was able to do this they might notice.

I guess I should have posted this on top but in my frustration did not. I book at the tail end of the run. In the case of these two titles they were 7th week and 8th week. Both were popular but were quoted to me at 35%. I played them each for one week (and that was six and eight weeks ago). hen I get this letter the other day saying that I, in fact owed 50% for one and 40% for the other and would I please send them their money. Now set aside for the moment that they weren't popular enough to warrant getting terms that high when they are seven and eight weeks old (No movie should get that). The REAL problem is that I wasn't told of it until weeks after I showed it.

LEE, I know how you feel, but this is not uncommon, and has been going on for eons... Years ago, a few months after I bought this place, I had a picture booked and a week before it was scheduled to open, the distributor informed me that they wouldn't furnish my print unless I paid an additional 10% for one of their pictures that the PREVIOUS OWNER had played several months before I bought him out... I paid, and he re-imbursed me, but just remember it ain't over even AFTER the fat lady sings!...

These posts remind me of why I am GLAD that I am not in the exhibition business these days: I am a moral man and NOT a businessman, so would expect FIRM, contractural payment agreements between my place and the the studio/distributor. To have to have a business supposed to succeed with only 'guessestimites' as to what one is supposed to owe someone, is akin to nonsense and financial suicide for a business. Yes, I understand that it is now regarded by most of you as 'business as usual' but that does not mean that it is right. To me, it is a case of the studios 'raping' the little guys for all they can, and whether or not they call it a sales promotional or some other euphemism, it is still a ruse, and rapacious and unconscionable to any moral people. This film business could be run on much more equitable grounds, but the exhibitors are in service to the studios and their henchmen, not the other way around. It is sheer greed, and the sad fact is how so many simply shrug their shoulders and say 'so what? Isn't everybody greedy?!' Thank God that He will not always allow these smug businesses of greed to continue forever; there is a time of reconing to come! Rev. 19:18

Jim R. (new E-mail:
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